Paul Wallbank – Communications Professional
Comms, journalism and writing
The flow of startups to Silicon Valley is a modern gold rush. Why are entrepreneurs making their way to the Bay Area?
Earlier this year I did a series of four stories for The Australian on why startups see Silicon Valley’s Bay Area as the best base for their businesses.
From the interviews there were a number of reasons for that migration and it was a fascinating exploration of what drives the development of today’s tech industry along with how a global industrial hub maintains its position.
The stories feature a diverse bunch of founders and businesses which in themselves are interesting tales.
For business founders thinking about moving to Silicon Valley the advice is ‘just do it’ from those who’ve done it.
This is the second of four stories I did for The Australian on why entrepreneurs are making their way to the United States’ Bay Area.
“Get over here as quickly as you can. Don’t worry about being ready, feeling fully baked or whatever,” says Bugcrowd founder Casey Ellis. “Do whatever you can to get a ticket over here, stay in a hostel and do whatever you need to be here and experience the place.”
Casey Ellis was speaking in the company’s converted warehouse offices just off San Francisco’s Embarcadero waterfront. “Half the price of SoMA,” he smiles while explaining what intending expats should prepare for when moving over to the United States.
Ellis has plenty of reasons to smile as a few weeks earlier the crowdsourced security testing service had announced a successful $15 million fund raising with Australian investor Blackbird Ventures leading the round.
While he was delighted an Australian investor had lead the funding round, Ellis believed the company had to have a US base from its early days. “One of the reasons for that is if we’re not here, we’re going to be competing with someone who is,” he says.
“When I started going full throttle into BugCrowd, the logic I applied to it was this is either going to fail as an idea or it’s going to move very quickly,” he told The Australian. “If it moves quickly we need to be in a position where we are resourced as well as possible. The place to do it is here.”
“What blew my mind when I got here. I had blinkers on and the move took them off and I’m like ‘there are opportunities here that I hadn’t dreamed of. The reason I didn’t know that was because I hadn’t seen it first hand.’”
Peter Grant of construction safety service Safesite found social media was a good tool to prepare for the shift to the United States. “If you’re looking at moving at over, but generally speaking you need to make sure there’s a good product and market fit. You need to establish your networks over here, even when I was back in Australia at Muru-D, Twitter was a good way to establish communications.”
“Don’t wait until you get to America, engage with your community and your market as soon as you possibly can. Go onto the webinars, know the language, know the language, know the players – it’s a big country so there’s lots of players. Just start to get involved as soon as you possibly can.”
Founded in Brisbane after Grant found most construction businesses monitored site safety with pen and paper systems, Safesite first moved to Sydney to be part of the first round of Telstra’s Muru-D program. In 2015 he moved to the US as most of the platform’s users were American based and has since set up a network of distribution agents across the nation.
“If you’re an organisation like us that needs to be in the US to survive then get over here as soon as possible,” Grant points out. “We have a year on our competitors. If it’s going to be too complex or you already have a profitable business in Australia you may not need to come to the US, you have to be realistic about it. It might make sense to find a local partner.”
Should it make sense to move to the US then it’s important to capitalise on those initial contacts and market research, Grant believes. “When you get over here establish your product market fit and your face-to-face relationships, the dynamic factors that will influence your growth over here.”
The move though doesn’t come without costs he warns, “it can be expensive to set up a business over here so make sure your investors and your legal representation have a full understanding of the implications of what you’re doing and the processes.”
Jindou Lee of HappyCo also warns startup founders have to be prepared for some changes when moving to San Francisco. “If you really want to change the world and see your company succeed, get closer to your customers, you need to make sacrifices.“
The founder of real estate inspection app Happy Inspector, Jindou moved from Adelaide to the United States in 2012. After raising three million dollars in funding and being accepted onto the 500 Startups program, the company expanded into general business documentation and renamed itself to HappyCo. “My advice specific to moving to the US is… do it,” he says.
Connecting with the existing networks is also important, “the other piece of advice is to hook up with the different groups that are around,” says Bugcrowd’s Ellis. “The Startmates, the Blackbird folk – figure out who you can get in touch with. People like me who can sherpa you a little bit.” He says “Don’t rely too much on them as you won’t succeed as an entrepreneur if you do, but get a good solid start.”
Accessible capital, a huge market and a collaborative culture are why startup founders are making their way to Silicon Valley and San Francisco
This is the first of four stories I did for The Australian on why entrepreneurs are making their way to the United States’ Bay Area.
A combination of accessible capital, a huge market and a collaborative culture are why startup founders are making their way across the Pacific to Silicon Valley and San Francisco.
Despite their government’s ideas boom and an easier funding climate, Australia’s startups still see San Francisco and Silicon Valley as being the promised land. In this four part series we spoke to Aussie entrepreneurs about why they’ve made the move across the Pacific Ocean.
In a noisy coffee shop just off San Francisco’s Market Street, PixC founder Holly Cardew explains why she moved to the city. “It’s a place you fall in love with straight away – it’s the people and the attitude,” says Cardew. “You can do anything, people don’t look at you as if you’re crazy if you want to do something big.”
Cardew made the relocation to San Francisco to find funding for Pixc, a photo editing service that in 2014 was one of the first group of startups accepted into Telstra’s Muru-D accelerator program. In moving to the US she found American investors have far wider horizons than Sydney’s business community.
“Investors ask ‘what’s next?’” Cardew enthused, “in Australia, you don’t even think about that. Americans tend to think a lot bigger. Australians aren’t trained to think about it.” Another aspect Cardew highlights about the Bay Area business culture is how individuals are always happy to help out, “people always ask ‘how can I help’ she says.
One of those credited by Cardew and by many of the people interviewed for this is Temando founder Carl Hartmann. In an archetypal open plan shared office in San Francisco’s Financial District Harmann explains why he’s quick to help, “I’m here today because people who were kind enough to pay it forward.”
Temando, a logistics service founded in Brisbane, was started to address the difficulties retailers had in fulfilling customers orders across Australia. Hartmann moved to the United States at the beginning of 2015 to access North American customers and to tap local capital markets. “When you talk to the SV funds it’s very hard to raise money if you aren’t here,” he says. “In Silicon Valley it’s where the action is. If you’re not here you are out of sight and out of mind.”
“It’s difficult to build those sort of relationships from the other side of the world. When you’re here, things can move along quickly because it’s easy to collaborate on things. It’s easier to work face to face. For us it makes sense to be here,” Hartmann says. “There’s a unique energy where everyone has come from all over the world.”
Jack Gonzales of location mapping service MapJam is an example of how fast things can move for companies in the Bay Area. “Last year we were approached by some of the big players who asked if we had our own map tiles,” he recalls. “We realised we had an opportunity.”
Gonzales was speaking at the somewhat chaotic San Francisco campus of 500 Startups across from the city’s Moscone Convention Center. Mapjam was accepted onto the prestigious startup investment and acceleration program last year.
“You have a goldmine in your local backyard and you have to capitalise on that. Sometimes it’s really spontaneous, ‘hey can you guys come in on Friday?’ You can’t do that when you’re overseas,” Gonzales says. “Our main customers are here and I really want to conquer the backyard before I conquer the globe, just within walking distance from here there are thirty major players.”
Australia does have some advantages for startups, particularly in labor costs for skilled developers. “It’s three times more expensive to employ staff in the Bay Area,” says Affinity Live’s Geoff McQueen in explaining why he’s kept the company’s technical team in the firm’s home town of Wollongong
McQueen, who moved to San Francisco in 2011 to seek funding for his venture believes “Australia is a good place to do a minimum viable product or proof of concept” and warns budding entrepreneurs to have more “than just just a PowerPoint pitch” when they decide to make a permanent move.
In McQueen’s view it’s important to at least visit the Bay Area early in the process of developing a business. “Come over as soon as you can – even if you only have a light idea,” he says. “Anchor your visit around a conference, whatever is relevant to your target industry.”
Despite not finding gold on San Francisco’s grubby streets, most of the entrepreneurs The Australian interviewed were all happy they’d achieved their aims in moving to the US which vary from easier funding availability, access to bigger markets and a more vibrant ecosystem than those in Sydney, Melbourne or the smaller centres.
Ultimately though everyone mentions the supportive nature of the Bay Area’s startup culture, “people ask what can I help you with,” says Pixc’s Cardew. “You can do anything, people don’t look at you as if you’re crazy if you want to do something big.”
The small business sector is essential to the broader economy’s health and diversity but in many countries it’s shrinking. How do we reverse the trend?
In most developed countries the small business community is shrinking. What can governments and communities do to grow what should be the most vibrant sectors of their economies?
What happens when a whole industry shuts down overnight? Australia is about to find when its motor industry effectively comes to an end this week.
The fallout for the workers is expected to be dramatic with researchers reporting the soon to be laid off staff being totally unprepared for their predicament.
So worrying is the predicament of those auto workers that Sydney tech incubator Pollenizer is offering small business workshops for laid off workers.
Those workshops will be needed. One of the striking things about the research is just how few of the workers are interested in launching their own ventures despite their poor employment prospects in other industries.
While the auto workers are a group with relatively low levels of education and work experience, their reluctance to starting a business is shared by most Australians with the nation’s Productivity Commission 2015 enquiry on business innovation reporting the number of new enterprises is steadily falling.
Despite Australia’s population increasing twenty percent since 2004, the number of new business is falling. The country is becoming a nation of risk averse employees, something not unsurprising given the nation’s crippling high property prices which puts entrepreneurs at a disadvantage.
Australia’s reluctance to set up new ventures isn’t unique, it’s a worldwide trend with most countries not having recovered since the great financial crisis.
The tragic thing with this small business drought is that it’s never been cheaper or easier to set up a venture as Tech UK and payment service Stripe show in their list the software tools being used by ventures.
Accessibility of tools or even government taxes and regulation isn’t the barrier in Australia. As the World Bank reports, the country is the eleventh easiest place in the world to start a new venture.
In United States experience shows there’s a range of other factors at work dissuading prospective small business founders – interestingly the United States comes in at a mediocre 47th as a place to start a venture in the World Bank rankings.
A healthy and vibrant small business sector is important to drive growth and diversity in the broader economy. The challenge for governments and communities around the world is to find a way that will spark the small business communities, in a world awash with cheap capital that shouldn’t be impossible but we may have to think differently to the ways we are today.
What are the basic online tools for business? Here’s a quick list on what small and startup businesses can use to get online quickly and cheaply.
What are the basic online tools for business? Here’s a quick list on what small and startup businesses can use to get online quickly and cheaply. This list will be updated regularly and please let us know if there’s anything we should add.
Google Hangouts (being depreciated)
Founders’ attitudes, market position and the opportunity to pivot are what Chinese investment firm CRCM looks for in an investment
What does one of the biggest Chinese backed investment funds look for in prospective companies? During their recent visit to Sydney China Rock Capital Management’s Venture Capital‘s Toby Zhang and Matt Lee spoke about the company’s investment philosophy.
“In general we invest in very early stage investments – we focus on seed to Series A,” says Zhang, one of the company’s partners. “At these stage of development we’re looking at a combination of talent, technology and market.”
“We like to bring these early technology companies to the markets like China and west coast US where we’re familiar, a lot of the companies partner with us because we can help overseas.”
Zhang and Lee were in Sydney for the announcement of their investment into a local VR video capture company, Humense, the fund’s first foray into Australia.
“When we first started CRCM we only invested in Chinese internet companies,” explained Zhang. “While we’re based in Silicon Valley we were looking at what’s going on in mainland China. We’ve launched three additional funds, all three of these are early stage and cross border. We not only invest in China but also in the US, Israel and now in Australia.
“We spend more than fifty percent of our time understanding the entrepreneurs and who’s behind the company. When we form a financial partnership it’s kind of like a marriage where getting a divorce is really difficult so you have to really understand the entrepreneurs.”
“Secondly we look for businesses which can easily pivot if they have to. A good example is a company we invested in recently called Music.ly. We were a fifth stage investor in Music.ly while they still in Shanghai, we saw entrepreneurs who we knew from their previous jobs so we knew how talented they were and we were prepared to back them.”
“More importantly though was their business’ focus on social media particularly with the age group that the existing platforms were losing traction with.”
“Finally with technology we’re looking for companies that can create barriers early that allows them to outcompete their competitors.”
Humense’s volumetric capture relies on an array of cheap, commercially available cameras to collect the images, something that appeals to Zhang’s investment philosophy.
“We spent a lot of time looking at the VR space, particularly volumetric capture,” says Matt Lee who originally hails from Sydney. “we felt in Australia with the background of special effects and animation so we felt there was a strong talent base we could leverage.”
Toby Zhang sees the fund making more investments into the augmented and virtual reality sectors. “We think AR/VR is a global tech movement,” he says. “Although historically we’ve been mostly investing in Silicon Valley and China, we have been constantly looking for opportunities to get to know start-ups, entrepreneurs, and investors from all around the world.”
It’s notable the Chinese backed fund is now looking around the world for investment opportunities and focusing on VR and AR technologies.
That strategy makes sense as the barriers to entry fall and the tech industry’s focus moves beyond Silicon Valley and into new markets. Where the US investment funds go will be the big pointer of future opportunities.
What are the technology trends affecting businesses of all sizes?
This week’s The Future is now – Trends in the Modern Workplace webinar was an opportunity to look at the trends affecting small and micro businesses.
What’s notable is almost all the topics affecting small business are being felt by their corporate cousins. It shouldn’t be surprising the technology and social trends affecting society are equally being felt
Now the webinar is over, I’ve posted the presentation to Slideshare with the commentary below, we cover established trends like the shift to mobile then ponder the future of business with artificial intelligence and virtual reality.
The presentation ties up with the post I published a few days ago that provides the commentary to the slides.
Funding the businesses of the future will be critical to addressing the automation driven shifts in employment, how we fund them is one of today’s challenges.
What would happen if the world’s richest people invested in startup businesses? Bloomberg Business ran an interesting, if flawed, thought experiment looking at how many nascent companies each country’s richest individuals could invest in.
It’s surprising how low those numbers are and, if anything, the result underscore how the 1980s and 90s banking sector ‘reforms’ caused the world’s financial system to pivot from its historical purpose of funding commercial enterprises into speculation, rent seeking and manipulating markets.
Apart from a smattering of venture capital not much has replaced the banks in funding the SME and entrepreneurial sectors, if anything it has been those ultra high net wealth individuals who have been financing the investment funds providing capital to entrepreneurs.
How the finance industry evolves in the face of the fintech boom and a world that’s slowly becoming less indulgent of the industry’s greed will be one of the defining things of next decade’s business environment. For the small business and startup sectors getting the funding right will also be a key factor.
The biggest question though is job creation, being able to fund new and innovative investments will be one a critical concern for societies dealing with the effects of an increasingly automated economy.
Flying Solo’s future is now presentation looks at the technology and industry trends affecting small business
What is changing the modern business? In Flying Solo’s upcoming free webinar, The Future is now – Trends in the Modern Workplace, I’ll be exploring some of the technology trends changing the way we work.
A few of these trends are already here, like the mobile workplace but others such as artificial intelligence, the internet of thing and augmented reality are on the five year horizon and we can expect those technologies to have a major impact on the business in the medium term.
One of the industries we’ll be looking at is the automobile industry that’s facing massive changes as electric vehicles, driverless cars and smartcities change the way we use cars and get goods delivered. This sector is looking at both the immediate effects and the longer term effects of the technological change on their industry.
In preparing the presentation it’s striking how similar todays discussions about AI and and AR are with how we talked about the World Wide Web twenty years ago. At the time we didn’t see how companies like Google and Amazon were going to change they way we work and the way our customers buy from us.
Equally ten years ago we didn’t see how the mobile internet or social media was going to change the ways we did business or how our customers would buy. Today they are important factors.
The recent announcement of the iPhone 7 underscores just how the smartphone has become part of lives. No device has been adopted quicker by the marketplace and its effects on business have been profound and continue to be felt.
In the nine years since the iPhone was released, the mobile internet has boomed. Now almost all our customers are looking for our services through mobile devices – be they smartphones or table computers.
One of the things that ‘s worrying however is how few small operators have mobile friendly websites. This year’s Sensis e-business report found sixty percent of small businesses have websites but only forty percent of those were mobile friendly meaning less than a quarter were suitable for smartphones and tablets.
But it’s not just marketing – the mobile internet, smartphones and cloud computing is changing how workplaces operate. It’s becoming easier for employees to work remotely and for companies to be genuinely distributed and we’re seeing more businesses made up of workers scattered around the world, a good example being the company that created WordPress, Automattic, who are showing how a modern workplace can operate.
Automattic’s experience shows how companies can use the mobile and web based tools to manage a modern workforce. For solo businesses, being able to harness outside skills and participate in larger projects, is one of the great opportunities presented by the mobile world.
Key to business automation is how things are being networked. Increasingly things are being connected to the internet, whether it’s bees, kettles or tractors. If we can put a chip in something and connect it to the net, then we will.
Also, as anyone who deals with the supermarkets knows, large customers increasingly want suppliers to be connected into their data exchange platforms. That integration into supply chains is only going to increase.
This has a number of issues for organisations, first we need the technology to allow us to connect and the systems to efficiently exchange data with our business partners. We also need to know what is being collected by our devices.
‘Data is the new oil’ is one of the mantras we hear, however that overlooks that dealing with oil is a complex, often dirty and frequently dangerous business.
While having lots of data is an opportunity to get more understanding of our businesses and the markets they operate in, all of this information also has a number of hazards. Not least in securing it and making sure company’s, its employees and its clients’ data is safe.
The big challenge for businesses, big or small, is managing the data that threatens to overwhelm everyone. Being able to get value from the information flowing into the organisation while protecting the underlying data is going to be one of the big issues facing businesses of all sizes.
Much of the work in managing all this data will be done by computers – artificial intelligence, machine learning and automation are all going to be standard features in business.
For service providers, increasingly ‘bread and butter’ tasks are going to be taken over by robots that deprive them of business and cash flow. Other businesses however will see this shift as an opportunity to reduce costs and improve productivity.
Accounting service Xero is a good example where founder and CEO Rod Drury sees these technologies as changing the way we work, “Automation and machine learning are improving traditional services by streamlining compliance processes and creating new business opportunities, many of which are either no-touch or limited-touch.”
Increasingly we’re going to see these technologies built into the software programs we use, not just in accounting packages but also in areas like CRM platforms, email and even word processing,
One of the most exciting technologies of the moment are Augmented Reality (AR), Virtual Reality (VR) and, a combination of the both, Mixed Reality. While games like Pokemon Go! are leading the way it’s actually in industries like logistics, resources and public safety that are leading the applications of these technologies.
For smaller businesses technologies like AR and VR promise to help us visualise the data we have to deal with along with opening up a range of applications ranging from virtual meetings to prototyping. Coupled with technologies like 3D printing, VR and AR may open up a whole range of new industries.
This range of new industries means we’re going to need a whole new set of attitudes and business faces a cultural change as technology changes the workplace. Coupled with major skill shortages in most areas, corporations are going to need to find a new pool of diverse, qualified labour. This is great news for solo businesses.
Like everything there is also a catch, and small businesses are also going to have to embrace that diversity in looking for commercial partners, suppliers and customers. Increasingly, thinking outside the box to find people who can effectively use new technology is going to be important.
The good news is that mobile and cloud services coupled with most of the world becoming connected makes it easier for solo operators to find the skills they need. The real barrier lies in ourselves ditching old prejudices and assumptions
In conclusion, we’re about to enter the next phase of the computer revolution. We’ve been through the PC period, we’re now in the middle of the smartphone era and the artificial intelligence age is about to begin.
The ultimate trend though is that business is going to get faster and solo business proprietors are going to face the same challenges as managers and executives in large corporations as a wave of data floods over us all.
One of the advantages for small businesses is we’re not saddled with legacy systems in the way large organisations and with the tools of the new era being affordable, means solo entrepreneurs can grasp opportunities far quicker than their bigger competitors.
The opportunities are there for us to take, we just have to seize them when when they appear.
The fate of the Concorde, the world’s only commercial supersonic airliner, is a lesson about innovation and business.
Why did the Concorde fail? Website Vox has a nice mini-documentary on the iconic supersonic airliner of the 1970s which looks at why the aircraft never became popular.
Fuel costs, opposition to supersonic flights and the aircraft’s limited passenger capacity are all factors cited in the story.
Passenger capacity turned out to be the main reasons why the project wasn’t a commercial success as the economics of the airline industry changed over the decade it took to develop the aircraft.
Wide bodied jets such as the DC-10, the L-1011 and, most importantly the Boeing 747, offered much better profits and reliability for airlines while the 1978 US airline industry deregulation act democratised air travel in the world’s biggest market. The 1973 oil shock which saw fuel prices was .
As a high priced luxury, the Concorde couldn’t compete in that market. It was only the British and French governments absorbing development costs that allowed Air France and BA to fly it for as long as they did.
Interestingly, we’re seeing a similar shift affecting the Airbus A380 which has been affected by the airline industry shifting from four engine long distance jets to cheaper two engine planes and consumers show their preference for ‘point to point’ networks rather than ‘hub and spoke’ operations – the biggest customer for the A380 is Emirates Airlines which routes almost all of its global operations through Dubai.
The Concorde was one of several brave experiments of the 1960s but its demise shows that despite how impressive the technology was, it was no match for economic reality. That is something we need to keep in mind as we marvel at today’s advances.
The City of Sydney elections illustrate how limited governments are in promoting a region’s startup sector.
Over this week I’ve been posting a series of interviews with the candidates for this week’s Sydney Lord Mayoral election. All of the teams have interesting schemes and ideas on how they can improve the city’s profile as a global tech centre.
While each team’s plans are worthy, it’s worth asking exactly what governments can do to make their communities more attractive to businesses and whether short term subsidies and incentives can help.
There is some evidence they can, prior to San Francisco changing its tax rules the city took second place to Silicon Valley in the southern Bay Area. In the last ten years, the city has become the focal point for the tech industry.
However there is a counter argument that San Francisco benefited on a generational shift of lifestyle preferences away from the leafy suburban lifestyles of Palo Alto and San Jose to the grungy but walkable communities of the Mission and SOMA.
The Bay Area though is a special case, Silicon Valley’s success as a tech hub is based upon massive Cold War tech spending that drove the region’s industry and its that high level support that probably tells us more about government support.
In the case of London and Singapore, the successes have been due to the national governments putting in broader economic reforms and incentives. Also their proximity to Europe and East Asia respectively has made both cities attractive.
On balance it’s those broader economic factors that make regions attractive as industries clusters – local incentives count little compared to access to factors like markets, capital and skilled labour. Taxation is, at best, a secondary issue.
The biggest challenge for Sydney, and most Australian cities, is the the crippling cost of property. In 2013, staff.com released a survey showing Sydney to be second only to Zurich in the cost of establishing a startup.
In many respects, the cost of property doesn’t really matter to prosperous industry hubs – San Francisco, London, Singapore and New York are all eye wateringly expensive and yet they still thrive – however all of those cities have better access to capital and markets, if not labour, than Sydney.
Addressing Sydney’s chronic shortage of affordable accomodation is firmly in the state and Federal governments’ remit and beyond giving property developers a green light to build high rise apartments neither level of government has shown any interest in addressing it.
Similarly, the tax structures which penalise Australian employees of high growth businesses and dissuade investment in early stage ventures are totally the responsibility of the Federal government and it’s hard to see that changing in the term of the current dysfunctional administration.
The relative powerlessness of local governments leaves initiatives by the City of Sydney limited in scope and schemes to promote the city or offer incubator space are peripheral to the factors that encourage the development of a global industrial centre.
Ultimately though, the question has to be how much any government can do to create a Silicon Valley, factors such as labour availability and access to capital come down as much to the community’s attitudes and business’ risk tolerances.
So perhaps we focus on what governments can do for business. Maybe just providing a level playing field can be the best we can hope for.
Joining forces with the tech disrupters can be risky as governments doing deals with Uber over public transit are learning
At last year’s Dreamforce, Uber founder Travis Kalanick sat down with Marc Benioff to discuss the ride sharing service’s history and its aspirations to reinvent public transit.
Those aspirations are coming to fruition reports The Verge as local governments across the US sign agreements with Uber to supplement their public transport networks.
In entering those arrangements local officials are finding a number of problems, not least the service’s obsession with secrecy that falls foul of US public data practices and legislation.
That clash between the Silicon Valley obsession with hoarding intellectual property and US open government beliefs is one that will become more common as agencies attempt to ‘Uber-ize’ their services.
However the Uber model isn’t working well in some markets as the fate of Washio shows.
A month ago Mic Magazine wrote about how Washio was a symptom of the ‘disruption’ being wreaked on communities by the tech industry as high priced services displaced undercapitalised smaller business.
Washio’s success, like Uber and most of the tech startups following the Silicon Valley greater fool model, required capturing enough of the market to have a dominant position in the marketplace making it hard for new competitors to enter while driving out existing players who can’t afford to make losses indefinitely. This is path followed by Amazon, Microsoft and even IBM.
However this strategy is risky if there’s not enough capital, which Washio has now found with the service entering bankruptcy this week.
The sad thing is Washio’s unprofitable and unsustainable business model let them kill other companies whose owners, managers or investors were unable or unwilling to compete with a loss making enterprise.
For small businesses in particular the effects of a well funded megalith intent on driving them out of business is particularly cruel – as we saw with booksellers and Amazon.
Local governments need to be particularly aware of the risk of making Uber the only provider of neighbourhood public transport, leaving them the sole player that owns all their data could well prove particularly costly, one only wonders what could happen had a local hospital done a laundry deal with Washio.
